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Category: Trade & Industry

Trade & Industry news covering business developments, industrial growth, manufacturing trends, and economic policies shaping domestic and global markets.

  • FPCCI hails speedy customs clearance

    FPCCI hails speedy customs clearance

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday hailed the tax authorities for speedy customs clearance to goods imported by erstwhile FATA/PATA.

    Mian Nasser Hyatt Maggo, President and Nasir Khan Vice President of the FPCCI appreciated the FBR for its efforts to improve ease of doing business and trade facilitation by allowing clearance of goods imported by ERSTWHIL FATA/PATA and installations of tracking devices manually to ensure en-route monitoring and tracking till the development of the functionality in the WEBOC system.

    They further informed that under this FBR directives the processing of such consignments may be cleared in the system by the respective Collectorate after implementation of the required conditions as prescribed in the CGO and Board instructions.

    M/s. TPL Trakker (Pvt.) Ltd. has been assigned for manually installation of tracking devices for consignments.

    Control mechanism for clearance of such consignments will remains with the Collectorate while it may get the written confirmation for concerned clearing agents/bonded carriers.

    While referring FBR’s Order issued on March 17, 2021 they said that FPCCI have been emphasizing for development of economically deprived regions through enhancement of transit trade by improving trade facilitations.

    They further added that the global economic scenario has drastically changed, e-commerce and digitalization has gained significance for international trade therefore, FBR and other stakeholders should also follow and improve their working according to the new technological development in trade.

  • FBR urged to withdraw CNIC condition under sales tax law

    FBR urged to withdraw CNIC condition under sales tax law

    KARACHI: Federal Board of Revenue (FBR) has been urged to withdraw the mandatory requirement of Computerized National Identity Card (CNIC) on buying and selling under Sales Tax Act, 1990 till the time a sufficient number gets register for sales tax.

    Karachi Chamber of Commerce and Industry (KCCI) has highlighted the issue as by amendment to Section 8 (Sub-Sec.1, Clause M) of Sales Tax Act, and addition of 10th Schedule, it is mandatory to provide CNIC number of Unregistered person in the invoice. Similar statute has been added U/S.19A of Federal Excise Act, Sec.216A to ITO and Sec.156A of Customs Act.

    Moreover 3 percent further tax is also charged on sales to unregistered buyers even if the CNIC number is provided, which is totally unjust and tantamount to penalizing the registered persons who have to bear the burden of 3 percent further tax.

    The chamber said that rather than generating more revenue, this provision has resulted in proliferation of undocumented cash transactions.

    With hardly 45000 registered entities in Sales Tax Regime, it is very hard to find a registered buyer. This has affected the entire supply chain including manufacturers, importers and traders in Documented Sector and has led to greater advantage for smugglers and undocumented sectors as they do not have to face any such condition. Many registered person are now forced to issue flying invoices to registered persons to overcome CNIC condition and avoid 3 percent Further Tax.

    The chamber recommended that requirement of CNIC should not be mandatory till the time that number of registered persons in Sales Tax regime has substantially increased.

    Providing CNIC number should be optional and may be treated at par with STRN if provided in the Sales Tax Return.

    Further Tax on supplies to unregistered buyer should not be charged if CNIC number is provided in Sales Tax Return.

    In case CNIC number of unregistered buyer of Raw Materials is not provided, VAT may be charged at 1.7 percent on sellers of Raw Material.

    Giving rationale, the chamber said that it will discourage cash economy and encourage documentation by placing the trust in registered persons.

    Discourage Fake and Flying invoices which are issued to avoid 3 percent further tax.

    Enhance business transactions through banking channels and promote growth.

  • Duty, tax exemption on tea export grossly misused: PTA

    Duty, tax exemption on tea export grossly misused: PTA

    KARACHI: Pakistan Tea Association (PTA) on Saturday pointed out gross misuse of duty and tax exemption granted on tea re-export by importers of tea as raw material.

    The office bearers of the association pointed out the SRO 450 which is meant for re export of tea after value addition, the importers who have exemption of this particular SRO, this is observed they are misusing this exemption and selling teas to various cities across country without any documents.

    Though the teas imported meant for re-export, these teas are imported at zero rated duties and taxes ,this is noticed these teas are not even going to specific warehouses and cities, these malpractices causing huge loss to revenue and discouraging the importers who are paying full duties, they added.

    PTA office bearers Muhammad Aman Paracha, Chairman and Zeeshan Maqsood, Sr. Vice Chairman and Convener, FPCCI Standing Committee on Tea Trade on the occasion expressed their views that tea is common men drink and shall be treated essential and common men drink rather than luxury, tea is the only traditional product being consumed by elite class & poor people.

    Revised duties and taxes are suggested for the upcoming federal budget 2021/2022: “Custom Duty 5 percent, sales tax 7 percent, withholding tax 2 percent and additional customs duty at 0 percent.”

    Chairman said that the tea is a raw imported from various countries blended and processed and available to the end users. Therefore, this shall be treated as raw material rather giving incentives to selected importers.

    Besides, tea importers are also paying 30 percent value addition at port stage as a retail/end user tax on the basis of minimum retail price.

    In light of above it is requested that fool proof system shall be adopted by the relevant authorities of Federal Board of Revenue (FBR) and shall be strictly monitored, whether teas are going to their respective registered cities/areas? And re exported as per directions in this specific SRO.

    PTA representatives showed fear if the options/exemptions highlighted above will be continued than legitimate business will come to halt & everyone will try to get such exemptions, this could be serious threat to state revenue & revenue loss will start escalating.

    Further few importers successfully obtained various tax exemptions for PATA/FATA & Azad Kashmir etc which is also being misused, this is observed that teas imported under said exemptions are also going to other cities rather than to specific areas, this must be monitored strictly as well.

  • FPCCI expresses concerns over falling foreign direct investment

    FPCCI expresses concerns over falling foreign direct investment

    KARACHI: Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has expressed concerns over falling foreign direct investment (FDI) despite incentives granted to foreign investors.

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  • Importers face surcharges on overstayed consignments

    Importers face surcharges on overstayed consignments

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has discussed the matter of overstayed consignments at warehouses which was causing surcharges on clearance to importers.

    FPCCI President Mian Nasser Hyatt Maggo on Thursday said that due to COVID-19 commercial activities are down causing overstay of consignments and subsequently facing surcharge on clearance. During the meeting of the FPCCI Advisory Council on Budget various issues were discussed including period of limitation of warehousing.

    The President FPCCI said that the economic slowdown, recession in the market and financial constraints due to COVID-19, importers are unable to clear their consignments in time which has led to a situation where large quantities of warehoused goods have piled up incurring heavy surcharge as no general concession has so far been extended by the Federal Government in this matter. The situation is also impacting substantial amount of revenue.

    During the meeting of the Advisory Council headed by Mr. Zakariya Usman former President of FPCCI issue of importers of raw material were presented who are facing problems due to their consignments lying in customs bonded warehouses beyond the period stipulated under section 98 of the Customs Act, 1969. The meeting resolved to approach FBR to consider grant of waiver of surcharge on overstayed consignments in order to alleviate the problems of the importers.

    Mian Nasser Hyatt Maggo President FPCCI said that the government under the present difficult circumstances may favourably consider the enhancement of customs bonded warehousing period limitation up 60 days so as to mitigate hardship of importers.

  • Customs reluctant in giving WeBOC access: ANF

    Customs reluctant in giving WeBOC access: ANF

    KARACHI: Commandant Anti-Narcotics Force (ANF) Brig. Syed Waqar Haider Rizvi has said that ANF’s examination procedure can be expedited if it was given access to WEBOC system which was being demanded since last three years but unfortunately Customs authorities were reluctant to give WEBOC access.

    “If we get access to WEBOC, it would make things easier for us and minimize the grievances being faced by business community. Although we have been constantly demanding access to WEBOC but KCCI must also do the same and take up this matter with higher authorities so that ANF gets WEBOC access which would surely prove favorable for all stakeholders”, he added while speaking at a meeting during his visit to the Karachi Chamber of Commerce & Industry (KCCI).

    Deputy Director/ In-charge, Port Control Unit ANF Muhammad Ayub, President KCCI Shariq Vohra, Senior Vice President Saqib Goodluck, Vice President KCCI Shamsul Islam, Chairman Law & Order Subcommittee Junaid ur Rehman, KCCI Managing Committee Members and others attended the meeting.

    While referring to inspections being carried out by ANF and Customs Authorities at the airports, he said that the Custom Authorities initially carry out the inspection of baggage while ANF staff was the last one to perform the same task at the airport which outrages many passengers as they have to go through the same procedure again.

    “Hence, we felt it necessary to request Customs Authorities to jointly carry out the examination with ANF officials so that passengers’ hardships could be minimized but the customs authorities have not taken ANF’s request into consideration.”

    Replying to concerns expressed by meeting participants over unavailability of ANF staff that often delays the examination, he said that majority of the Terminal Operators and port authorities were unwilling to give space to ANF for setting up a small office which was the basic reason for delays. However, ANF, with a workforce of 3,000 personnel only across Pakistan, was trying its best to deliver within the available limited resources.

    “All stakeholders including traders, port authorities, Customs, ANF and Pakistan Coast Guard must sit together to discuss and resolve problems surfacing due to poor repacking after examination”, Commandant ANF said while responding to apprehensions expressed by KCCI members over poor repacking that damages the goods in transit.

    He said that ANF was cognizant of the hardships being faced by importers and exporters due to delays in examination of goods and was trying its best to minimize the grievances by examining minimum number of containers.

    Commandant ANF suggested that KCCI should give a focal person so that the issues faced by its members in dealing with ANF could be swiftly resolved. “Frequent interaction between KCCI and ANF would help in resolving most of the issues”, he said, adding that ANF carries out its activities for the betterment of Pakistan without any compromises.

    “We have to work collectively for creating an enabling environment”, he said while extending full support and cooperation to KCCI in promptly dealing with ANF related issues.

    Speaking on the occasion, President KCCI Shariq Vohra stressed that ANF must focus on improving its perception and has to fully facilitate the business community as in many cases, the Force was being accused of creating hurdles and delaying the clearance procedure.

    He was of the opinion that interaction between KCCI and ANF must regularly take place so that the issues could be regularly discussed and amicably resolved. “We are not against ANF activities as they have a major responsibility on their shoulders which is to intercept the influx of drugs and narcotics. Although stringent efforts are needed from all stakeholders to make Pakistan a completely drugs-free state but, the examination procedure has to be speeded up as at times, delays cause severe losses to business community.”

    The meeting participant raised concerns over delays in examination by ANF which leads to causing losses on account of demurrage, detention and ungrounding charges. They also suggested that ANF must enhance number of workforce and resources while the obsolete scanners at the ports must also be replaced with the latest ones and more scanners must also be installed at all the ports in Karachi.

  • FPCCI demands restriction withdrawal on input tax adjustment

    FPCCI demands restriction withdrawal on input tax adjustment

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has demanded the tax authorities withdraw restriction on input adjustment under Sales Tax Act, 1990.

    A statement issued on Wednesday said that Advisory Council of the FPCCI on budget found various laws and regulations that failed to generate much revenue on the other hand badly affecting ease of doing business ranking of Pakistan.

    Mian Nasser Hyatt Maggo President FPCCI in this regards has already communicated to the Prime Minister and other concerned ministries for such impediments that are negatively impacting economic growth.

    During the meeting Advisory Council of the FPCCI has decided to extend its full support and cooperation to the government which is struggling to improve economic environment under the adverse conditions created by COVID-19.

    The Advisory Committee during its first meeting analysed the hardships being created under section 8B of the Sales Tax Act, 1990, wherein a registered person is not allowed to adjust input tax in excess of ninety percent of the output tax.

    “This restriction not only restrains the taxpayer to claim its legitimate input tax but is also affecting the ease of doing business and thereby increasing the cost of business.”

    The Advisory Council under the Convenership of Mr. Zakariya Usman former President of FPCCI reviewed the whole scenario and after due diligence unanimously proposed that hardship and discrepancy created by Section 8B of Sales Tax Act should be removed in the adjustment of input and output tax by allowing 100 percent adjustment of input tax.

    Amendment in Section-8B of Sales Tax Act 1990 should be made in the coming budget to allow 100 percent adjustment of input tax against output tax to all registered persons in order to remove anomalies.

    Mian Nasser Hyatt Maggo President of FPCCI has categorically informed that the present global and domestic conditions are completely different; COVID-19 has changed the world economic situation dramatically as most of the businesses are struggling for their survival.

  • APTMA condemns lobbying for Indian yarn import

    APTMA condemns lobbying for Indian yarn import

    KARACHI: All Pakistan Textile Mills Association (APTMA) has strongly condemned vested interests for fake claims of shortage and lobbying for import of yarn from India.

    Asif Inam, Chairman – APTMA Sindh-Balochistan Region strongly condemned mala-fide propaganda of shortage and unavailability of yarn despite yarn import is allowed from all over the world except India in response of their restriction on import of Pakistani products.

    In a statement issued to the press and electronic media, Asif Inam said that as per Customs data yarn is already imported from 59 countries.

    Their love for India despite the hostile attitude for Pakistani products is not understandable and the data is strangely fabricated to portray gloom and doom situation of slight decline in exports by comparing exports of 28 days February of 2021 with 29 days February of 2020 which was the leap year.

    Asif Inam further said that the downstream industry is creating hue and cry of unavailability of cotton yarn even though they are availing all facilities which are not provided to the exporters of yarn including subsidized Export Refinance Facility, Duty Local Taxes and Levies (DLTL), etc.

    Moreover they are also allowed to import duty free cotton yarn under DTRE, Export Oriented and Manufacturing Bond Schemes if they find the local yarn expensive.

    On the one hand downstream industry is claiming and pushing the government for long term policies and at the same time would like government interference to rescue them from any bad decision of forward selling of foreign exchange, not selling of foreign exchange and higher commodity prices all over the world due to relentless money printing by developed countries during COVID-19 which everybody has to dealt with.

    Asif Inam urged the government not to allow import of cotton yarn, etc. from India until they restore normalization in trade with Pakistan.

  • Business community hails decision to simplify tax laws

    Business community hails decision to simplify tax laws

    KARACHI: Business community has praised Prime Minister Imran Khan for issuing directives to the authorities for focusing on tax reforms, simplification of tax laws and plugging loopholes in existing tax system, a statement said on Sunday.

    Mian Nasser Hyatt Maggo President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) lauded Prime Minister Imran Khans directives to focus on reform in tax regime, simplification of tax laws, plugging existing loopholes, reduction in discretionary powers of tax collectors, automation to bring transparency in tax system.

    He said that it is heartening that Prime Minister is equally concerned with the tax reforms for accelerated growth. He said that understanding of Prime Minister in this regard shows his deep insight on the issues that are impeding economic growth with great attachment to the business community of Pakistan.

    He further stated that the Prime Minister has rightly taken up the issue of reforms in tax regime. The structure of taxation in our country is regressive, with indirect taxes accounting for major of total federal government tax collection.

    Tax collection is also disproportionate; industry being overburdened with tax payment of more than 60 percent against about 20 percent size in GDP. The present tax structure is complex because of overlapping jurisdictions with different laws and frequent policy changes through on almost daily basis by issuance of instructions, clarifications, changes in rules, CGOs, STGOs, ITGOs.

    The income tax, GST on goods, customs duties, federal excises is collected by the FBR while GST on Services is collected by provincial Revenue Boards/Authorities which also fragments Pakistan into five business market economies.

    The withholding tax regime of over 65 in numbers is also problematic and businessmen have been made withholding agents to deposit the tax for FBR.

    The President FPCCI said that the tax returns should be simplified and easily understandable particularly for SMEs and make it single page document. The present system requires almost all the tax returns filing persons to have further burden of associating the service charges of tax consultants and lawyers due to complicated tax operating system.

    He also informed that he has already written letter to Prime Minister for considering various suggestions on required tax reforms including complex Income Taxation to change to Flat Rate Taxation, taxation system to induce investments, multiple sales tax to change to single stage sales tax across the Board with exemptions on food, live saving drugs, educational instruments. Further the low rate Custom duties without additional custom duties, regulatory duties are answerable to impeding connived smuggling, mis-declaration. The Appellate tax system should be converted into independent tax judicial system in conformance with the requirement of constitution to increase the trust of businessmen in the taxation system.

    Mian Nasser Hyatt Maggo said that taxpayers bill of rights, protection of businessmen against retaliations by tax officials and accountability of tax officials should constitute fundamental to the requirements of tax reforms. The FPCCI has been demanding withdrawal of discretionary powers vested with the tax officials to avoid their misuse as presently FBR has become show-cause generating machinery for existing taxpayers, as are being informed to us at large.

    He stated that to wipe-out corruption there is need to improve automation in tax system and develop local software and Apps with simplified system so that interaction of human resource should be reduced and strengthening of information technology system can combat issuance of connived bogus sales tax refunds which not only affect government revenue but also damage business community credibility and trust.

    Mian Nasser Hyatt Maggo the President of the federation of Pakistan chambers of Commerce and Industry appreciated that a very good move has been done by present government by separating tax policy unit under Ministry of Finance and not under revenucracy adjustment methods of FBR who are only making tariff rate adjustments and making changes in statutes on compulsions due to observations of High courts and Supreme courts during budgetary exercises.

    He said that may be this year the budgetary exercise if is done by tax unit in Ministry of Finance may lead to compliance with directives of Prime Minister on tax reforms.

  • PYMA demands cut in duty rates on polyester yarn import

    PYMA demands cut in duty rates on polyester yarn import

    KARACHI: Pakistan Yarn Merchant Association (PYMA) has demanded the government of immediate reduction in duty rates on import of polyester filament yarn to ensure bring down prices of the commodity.

    Hanif Lakhany, Senior Vice Chairman PYMA and Vice Chairman Farhan Ashrafi urged the government to immediately remove additional customs duty at two percent and regulatory duty at 2.5 percent on the import of polyester filament yarn as an interim relief.

    Furthermore, they demanded a review of tariff structure on the entire polyester chain to make our user industry consisting mostly of small and medium size enterprises competitive to enhance our exports.

    They termed catastrophic for small and medium enterprises (SMEs) over not reviewing the tariff structure of polyester chain and not allowing immediate duty-free import of cotton, polyester cotton and polyester filament yarn by the government, and feared that the textile industry would be ruined if it was not possible to supply raw materials at reasonable prices as per the production demand.

    PYMA office bearers met with a delegation of polyester yarn users, industrialists, importers and traders, raising their concerns, they said that the government is aware that cotton production has declined this year, while the skyrocketing prices of polyester filament yarn, the main raw material for the textile industry, have pushed up production costs to an unbearable level

    “As a result of higher prices in the local market, small and medium enterprises (SMEs) have no choice but close their units, if nothing is done to alleviate the pain of super high prices, it may be posing a grave danger to the fragile export growth”, they pointed out

    PYMA office bearers said that we really appreciate that the government is seriously considering measures to tackle the escalation of cotton yarn prices but there is also a need to review the current tariff regime of the Polyester Chain, if we really want Pakistan to be truly competitive in the international market.

    “Polyester filament yarn is subjected to 11% customs duty, 2% additional customs duty and 2.5% regulatory duty in addition to Antidumping duty ranging between 3-11% despite of the fact that local manufacturers of polyester filament can only meet less than one third demand of the user industry”, they added, these local manufacturers of polyester yarn enjoy tremendous tariff protection at the cost of very large small and medium size enterprises to the detriment of our stated public policy to make our value added industry competitive.